Tech industry legend and one of the finest creative minds of a generation, Steve Jobs, has resigned as chief executive of Apple, arguing he can no longer meet his duties and expectations to the company.

Apple's shares were suspended before the announcement but soon after dived 7 per cent in after-hours trade on the news that one of Silicon Valley's most celebrated luminaries, who was the beloved visionary behind the iPod, iPhone, iPad and Mac products, was bowing out for good.

The pancreatic cancer survivor, who co-founded Apple from a garage and brought the company back from the dead when industry figures including Dell founder Michael Dell were arguing it should be broken up and sold off, said he had maintained he would let people know if there ever came a day where he could no longer fulfil his duties as Apple's CEO.

"Unfortunately, that day has come," he said, adding he believed Apple's brightest and most innovative days were ahead of it.

"I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you."

Jobs briefly emerged from his medical leave in March to unveil the latest version of the iPad and later to attend a dinner hosted by President Barack Obama for technology leaders in Silicon Valley. He has now been elected as chairman of Apple's board of directors.

Analysts do not expect Jobs's resignation - which had long been foreseen - to derail the company's fabled product-launch roadmap, including possibly a new iPhone in October and a third iteration of the iPad tablet in 2012.

"Jobs has been a strong figure in the company historically, but he hasn't been a driving force for the past two years," Daniel Genter, who oversees about $US3.7 billion as president of Los Angeles-based RNC Genter Capital Management, told Bloomberg.

"It brings clarity, he will continue as a capable board member and it creates a transparent succession plan."

Tech industry left stunned

On behalf of the Apple's board, Art Levinson, chairman of Genentech, said Jobs's extraordinary vision and leadership saved Apple and guided it to its position as the world's most innovative and valuable technology company.

"Steve has made countless contributions to Apple's success, and he has attracted and inspired Apple's immensely creative employees and world-class executive team," he said.

"In his new role as chairman of the board, Steve will continue to serve Apple with his unique insights, creativity and inspiration."

Levinson said Cook's 13 years of service to Apple, including filling in for Jobs as acting CEO during his medical leave, meant he was the right person to be Apple's next CEO.

The announcement of Cook as Jobs's replacement was also likely to be welcomed by the industry and the market.

"Investors are very comfortable with Tim Cook even though Jobs has been a driver of innovation ... Tim has shown Apple can still outperform extremely well when he's been acting as CEO," Cross Research analyst Shannon Cross said.

"I don't know if it's a health issue. I don't know if it is a shock. Most likely it was going to happen at some point. Why today versus another day? I don't know."

Jobs's often-gaunt appearance has sparked questions about his health and his ability to continue at Apple.

"I will say to investors: don't panic and remain calm, it's the right thing to do. Steve will be chairman and Cook is CEO," said BGC Financial analyst Colin Gillis.

Bringing Apple back from the dead

Jobs, who co-founded Apple in 1976 at the age of 21, was ousted by the board in 1985. When he returned to the company in 1997, it had run up $US1.86 billion in losses over two years. Apple was 90 days away from bankruptcy, Jobs would later say. The company is now the second most valuable behind Exxon Mobil.

Jobs has long been the heart of Apple, making its most important decisions on product and strategy and being the company's public face for new product announcements. Almost always clad in his signature jeans and black turtleneck, Jobs has an unparalleled ability to build buzz and excitement about Apple's upcoming products.

Cook has never lifted the lid on a new Apple product and has yet to demonstrate that he has Jobs's grand vision. His expertise lies in daily operations and supply chains.

A rich history

Born in San Francisco on February 24, 1955, to a single mother and adopted by a couple in nearby Mountain View at barely a week old, Jobs grew up among the orchards that would one day become the technology hub known as Silicon Valley.

He was 21 and Steve Wozniak was 26 when they founded Apple Computer in the garage of Jobs's family home in 1976.

While Microsoft licensed its software to computer makers that cranked out machines priced for the masses, Apple kept its technology private and catered to people willing to pay for superior performance and design.

Under Jobs, the company introduced its first Apple computers and then the Macintosh, which became wildly popular in the 1980s.

Jobs was elevated to idol status by ranks of Macintosh computer devotees, many of whom saw themselves as a sort of rebel alliance opposing the powerful empire Microsoft built with its ubiquitous Windows operating systems.

Jobs left Apple in 1985 after an internal power struggle and started NeXT Computer company specialising in sophisticated workstations for businesses.

He co-founded Academy-Award-winning film studio Pixar in 1986 from a former Lucasfilm computer graphics unit that he reportedly bought from movie industry titan George Lucas for $US10 million.

Apple's lustre faded after Jobs left the company, but they reconciled in 1996 with Apple buying NeXT for $US429 million and Jobs ascending once again to the Apple throne.

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Since then, Apple has gone from strength to strength as Jobs revamped the Macintosh line, revolutionising modern culture with the introductions of the iPod, iPhone, iPad, and iTunes online shop for digital content.